Moving out of a House Hack
I'm looking at potential duplex house hack deals and they make sense from a buy perspective as they will be cheaper than renting and really decrease expenses when a tenant is in place. My issue is trying to evaluate if it will still be a good deal if I decide to sell or want to refinance. My plan is to use an FHA loan (potentially an ARM) and would want to refinance into a conventional loan once I move out. What should I be considering to know when the right time to refinance would be or if a house hack would be a good deal?
the question seems misplaced to me. You buy a house hack to reduce living costs and start collecting rental income.
refinancing doesn't change the mechanics of the deal. Is it a good deal or not?
and as for if it makes sense if you sell, if you buy a good deal, the sell will take care of itself.
House hacking will change your financial future. Get on that train as soon as possible!
Quote from @Allan Smith:
the question seems misplaced to me. You buy a house hack to reduce living costs and start collecting rental income.
refinancing doesn't change the mechanics of the deal. Is it a good deal or not?
and as for if it makes sense if you sell, if you buy a good deal, the sell will take care of itself.
House hacking will change your financial future. Get on that train as soon as possible!
I agree that definitely getting into a house hack is important, and the sooner you do so the better. My thinking and why I posed the question is that you hear how important it is to think about exit strategy before you get into any deal. So i'm trying to see how others who have house-hacked in the past evaluate their potential exit strategies when looking at house-hack deals. Hope that kind of clarifies what I was trying to achieve with my original post.
@Phillip Lewis I would stay away from the ARM and instead do a 2-1 rate buy down with seller concessions. This allows you to have a 2% lower rate first year and 1% lower in year two. This will help your cashflow until you move out and ideally rates are lower in 2 years and you can refi then.
It may help to evaluate it as a full rental as well as a house hack. See if it would cash flow if you didn't live there. It's hard to predict where rates or appreciation will go, but if you reduce your living expenses significantly with a house hack, the monthly savings should bankroll you for future investments.
Will it cashflow when you move out at 8%? if so then when you refi it will definitely cashflow. If its a good deal now, it will be later when rates go back down.